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The views expressed in this blog are my own and not that of any company, association or organization.

Yapta for hotels

In a tangential nod to tough economic times Orbitz announced that it will “Reimburse Some Customers if Airfare Later Falls”. Orbitz bills its program as “Price Assurance, a push to gain U.S. market share against other online travel agents, such as Expedia Inc. and Priceline.com Inc”. Such a move would have been unlikely in stronger economic times particularly without the aid of sites such as YAPTA, a website that tracks the prices of airline tickets as they change and sends customers a “price drop” email if the price goes down which may entitle the customer to a refund or voucher from the airline. Heretofore, yield management as practiced (and invented) by airlines was predicated on customers paying for seats (at supposedly the best price) based on availability at a given point in time . By moving away from that model and assuring customers they are “eligible” for a refund, revenue modeling is likely to be harder with erosion of profits in a largely unprofitable industry.

Such a trend can have material consequences for hotels, most of whom practice the yield management of yore. So far, there is no YAPTA (an acronym for our “Amazing Personal Travel Assistant”) for hotels as hotels’ “best rate guarantees” usually pertain to the period when booked. Some such as Marriott’s “Look No Further® Best Rate Guarantee” have a 24 hour period for the prospective guest within which a better rate, if found, is the chain not only matches the price but gives a further 25% discount. But no nationally recognized hotel chain leaves that period open ended like the airlines have begun to do. Were that to happen, no doubt in response to straitened economic times, there is little doubt that a YAPTA like site, if not YAPTA itself will emerge.

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Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS.President and ceo of New York City Hotel Association since January 2017. View all posts by Vijay Dandapani